“Programmatic advertising is an ever-evolving landscape. You all remember how we started? From direct sales to ad networks to ad exchanges, and came to introducing Private Marketplace (PMP) deals. But what ignites the change every time?
We say, Inability.
When ad networks couldn’t place ads based on behavioral data, ad exchanges were born. Similarly, to leapfrog the drawbacks of real-time bidding on open exchanges, Private Marketplaces (PMPs) were created.
Table of Content
- What is a Private Marketplace (PMP)
- Open-RTB Vs PMP
- Benefits of a PMP
- How does the future look for PMP?
What is a Private Marketplace (PMP)
A Private Marketplace refers to the real-time auction of publishers’ ad inventory in an invite-only set up with a selected number of advertisers. To put it simply, a private marketplace lets you cherrypick the buyers so that they can sell the ad inventories to the selected buyers at a premium price while maintaining a brand-safe environment.
The main difference between Open auctions and Private Marketplace auction is that PMP is an invite-only auction where a publisher invites advertisers to bid on its inventory. Due to this “invite-only” feature, this auction is termed as a private auction.
As the digital industry looks for a solution to ad fraud, more sellers and buyers tend to engage in a private marketplace where only high-quality publishers provide their ad inventory to selected advertisers.
The publisher is aware of the bidding buyers and the inventories (generally, premium) are sold to them at higher prices (CPMs). Without PMPs, we have to deal with:
- Increased ad fraud cases,
- Complaints of hidden vendor charges,
- Mishaps in targeting the correct audience, and
- Inability to connect a handful of relevant buyers with a publisher.
As PMPs are set to eliminate these drawbacks, spending on Private Marketplace deals continues to increase. According to a report by eMarketer, Private Marketplace will account for 51.1% of total Real-time bidding deals by the end of 2020.
Open auction (Open-RTB) Vs Private Marketplace (PMP)
In a Private Marketplace, publishers have better control over their ad inventories. Be it the CPMs, advertisers, and the type of creatives that will be displayed on their site. The private marketplace guarantees higher CPM as a publisher offers ‘first-look’ to the premium ad inventories to the buyers.
As per a survey by eMarketer, US advertisers will spend $11.81 billion on Open exchanges. On the other hand, Private Marketplaces’ ad spending will outshine and advertisers will spend $12.34 billion in PMP deals.
Private Marketplace deal provides transparency in publisher and advertiser relationships. Advertisers are fully aware of what they are buying and publishers are aware of who they are targeting and who is going to place ads on their inventories, which isn’t possible in open marketplaces.
Benefits of a Private Marketplace (PMP)
Private Marketplaces have grown substantially and will account for more than 40% of the total programmatic ad spend. It is expected to grow more by the end of this year. The best part is, PMP offers benefits to both publishers and advertisers.
“Growth in PMP ad spending will outpace that of the open markets by about 3 to 1 in 2020 and beyond.”
How? We’re glad you asked.
- PMP provides transparency for both publishers and advertisers. It is a step to shine a light on the obscurity plaguing the advertising ecosystem.
- It offers brands the opportunity to have clear control over where their ads are being promoted instead of being placed everywhere.
- PMP auctions allow a new way for publishers to fill their ad space. Instead of relying on the sales team, publishers can connect and make their inventory available to the selected advertisers via an ad server.
- It ensures premium inventory, thus assuring brand safety.
- It can give direct access to unique first-party audience data to advertisers and provide enhanced targeting capabilities.
- It helps advertisers to set new buys on top websites quickly and effectively on a specifically segmented audience base.
- It provides relevant ad impressions to the buyers.
- It prevents ad fraudsters and spoofers from siphoning the ad dollars.
- It offers a higher ROI for advertisers and higher CPMs for publishers.
How does the future look for PMP?
PMPs aren’t here only for a while. It is helping publishers, advertisers, and platforms to grow quickly by adopting and making it a part of their media selling/buying strategies. Along with traditional PMPs, there are multi-publisher PMPs available for brands, buyers, and agencies. Here’s a quick definition of them.
Buyers spend most of their time on managing and organizing deals individually, multi-publisher PMPs save buyers’ time by creating a single deal ID that allows instant scaling. They also offer customization based on the buyers’ needs.
For publishers, both Open Marketplaces (OPMs) and Private Marketplaces (PMPs) serve the same purpose. However, only a premium publisher with rich first-party data sets can woo advertisers and run sustainable PMP auctions. So, where does this leave the mid-market publishers? Psst…We helped hundreds of mid-sized publishers to frame scalable monetization strategies and set-up a Private Marketplace deal on their ad server. If you have a minute, feel free to get a free audit for your sites.